State revenue rise dampened by e-commerce VAT

First half income 3.2 per cent higher year-on-year. Would have been greater but for a "substantial" loss on e-commerce.

26.07.2017

Luxembourg's state revenues in the first half of 2017 were 3.2 per cent, or €230 million, greater than in the same period of last year, the country's statistics office Statec said.

The increase was tempered by a "substantial" value-added-tax loss on e-commerce, Statec said in a statement. Without that, the gain in total tax receipts would have been 5.3 per cent.

"VAT receipts excluding e-commerce have risen steadily," Statec said. "The gain registered was, however, more than wiped out by the loss in VAT on e-commerce, where receipts for the first half tumbled 75 per cent" or about €160 million.

Luxembourg's tax reforms, in force since January 1, slowed the amount coming into state finances from household income. That increased two per cent, or €50 million. It compares with a 5.7 per cent rise in the same period of 2016, Statec said.

Confidence remains high in the financial sector, Statec said.

"In the euro zone, all financial stakeholders remained confident regarding their activities throughout the first half of 2017," the office said. "Luxembourg benfitted from this favourable climate."